eBusiness Weekly
Business Writer
United States – based Ethos Asset Management Inc, has agreed to provide financing to Boustead Beef Zimbabwe for the resuscitation of once the country’s largest meat processor, Cold Storage Company (CSC), which ceased operations at the turn of the century.
The partnership provides long-term financing to Boustead Beef to invest in a rare and unique, social and impact opportunity for the refurbishment and restart of the former Cold Storage Company, Zimbabwe’s once world-renowned national beef production operations, at the behest of, and with the support of, the Zimbabwean Government.
Carlos Santos, chief executive of Ethos Asset Management Inc, said his company was impressed with Boustead Beef’s turnaround plans for CSC and the opportunity to expand investments into Zimbabwe. Ethos did not say how much it will provide, but CSC reportedly needs US$130 million for its turnaround.
“We are delighted to be partnering with such a prestigious company and nationally important organisation in Boustead Beef, the largest and dominant meat processing operation in Africa. Boustead Beef is the only integrated beef processing company, and vertically integrated grass-fed beef operation in Sub-Saharan Africa.
“We were very impressed with Boustead’s exceptional standards and level of operation in Zimbabwe. Our decision to invest was consolidated by Boustead’s inspirational President, Mr Nick Havercroft, a successful farmer, entrepreneur and operational executive who has spent his entire career in Zimbabwe and Africa, acquiring, building to scale and successfully operating farming enterprises. We are absolutely delighted at Ethos to be expanding our investments further into Africa and in particular, Zimbabwe for the first time.”
Havercroft, president and founder of Boustead Beef Limited said, “Boustead Beef is exceptionally pleased to receive the financial backing of Ethos Asset Management in support of Boustead’s mission to privatise, refurbish and restart a critical component of Zimbabwe’s infrastructure — its national beef industry. Boustead is fortunate to have a partner like Ethos, a financial powerhouse in both public markets and project finance, led by its visionary chief executive, Carlos Santos, whose project finance initiatives are making the world a better place for millions of people”.
Hans Kastensmith, executive director, Ethos, North and Central America, said the revival of CSC was critical given the sub-sector was an integral element of Zimbabwe’s economy.
“Ethos is pleased to be working with Boustead to revitalise the beef industry in Zimbabwe. This was an important part of the economy in the past and we know that with Mr Havercroft and Mr Santos’ combined leadership in operations and finance it will be once again”.
Ethos Asset Management (Ethos) is an independent, US-based company with global reach in resource mobilisation and project financing.
Boustead Beef was selected by the Zimbabwean government to privatise the former State-owned meat company and revitalise Zimbabwe’s national beef operations.
The UK-based investor, Boustead Beef, entered into a 25-year joint venture agreement with the Government in January 2019 to revive CSC, but the parties jointly filed for corporate rescue in December 2020 after some creditors sought to file for liquidation.
The firm’s business plan includes the implementation of regenerative farming methods and solar energy, collaboration with smallholders/local farmers, the creation of thousands of local jobs, and enhanced food security for Zimbabwe and neighbouring African nations.
Boustead was advised in this transaction by Worldwide Wealth Advisors and Nyansapo Impact Capital.
CSC had enjoyed a monopoly since 1937 when it was formed. But the Government deregulated the industry in 1992, which resulted in serious competition from private players, plunging CSC into a viability crisis following sharp decline in cattle throughput.
A year later, the company had lost 50 percent of its market share to private players.
Prior to liberalising the industry, CSC had not been financially capacitated to stand competition from private players. Since 1992, CSC largely survived on EU exports and had a US$15 million revolving payment facility with the bloc.
The facility was discontinued after the EU suspended imports in 2001 following an outbreak of foot and mouth disease. CSC had an annual quota of 9 100 tonnes and used to earn at least US$45 million per year from the EU export quota. Efforts by the company to enter Asian markets did not succeed after some food safety standards concerns were raised.
The company, which owns four abattoirs used to employ 1 500 permanent workers and an average 700 casual workers, making it one of the biggest employers in the country.
